Board Gender Diversity and Dividend Policy in Australian Listed Firms: The Effect of Ownership Concentration

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Abstract

We examine the association between board gender diversity and corporate dividend payout. We document a positive relationship between board gender diversity and both the propensity to pay a dividend and the magnitude of dividend paid. Our results suggest that board gender diversity has no effect on dividend payout when ownership concentration is high. We demonstrate that the increase in dividend payout is greater when boards have three or more women directors. In contrast, three or more women directors reduce dividend payments when ownership concentration is high. Our results indicate that the financial crisis period was associated with high dividend payments; however, women directors restrained the payment of dividends during the crisis period. These results suggest that board gender diversity may be an effective CG mechanism for alleviating principal-agent conflicts but not principal-principal agency conflicts. Our results are robust to endogeneity, as well as alternative proxies and estimation techniques.

Author

• Ernest Gyapong, massey University